Shilpa BistaConceptual Framework: Gender Wage Gap in Tajikistan To estimate the gender wage gap, this article uses a standard approach, the Oaxacan decomposition (1974), which involves decomposing the differentials average male and female wages in two components. One component is the “explained” effect on the wage gap that occurs due to an average difference in human capital characteristics between men and women receiving the same treatment, and the second is the “discrimination effect,” which indicates the “coefficient effect” on the wage gap the wage gap that occurs either because of the different treatment given to men and women given that they possess the same individual characteristics, or because of differences that cannot be explained by the regression model (Oaxaca 1973) . The wage equation for men and women is based on Mincer's (1974) human capital earnings function: ln⁡〖〖(W〗_i)=Z_i^' β+ μ_i 〗, i = 1,…,n where W_i is the hourly wage of worker i, β is a vector of coefficients, μ_i is a nuisance term, and Z_i^' is a vector of individual characteristics such as education, experience, gender, as well as occupational, industrial, regional, and economic indicators (Oaxaca 1974, 695; Bishop et al. 2005). The natural logarithm average earnings are calculated separately for men and women depending on their individual characteristics. The first step is to define a discrimination measure, which Oaxaca (1974) expresses as follows: D=(W_m/W_f -〖(W_m/W_f ) 〗^°)/〖(W_m/W_f )〗^° where D is the discrimination coefficient, W_m/W_f is the “observed male-female wage ratio” and 〖(W_m/W_f )〗^° is the “male-female wage ratio” wage ratio in the absence of discrimination” (694). The Oaxaca (1974) measure of discrimination assumes that in...... middle of paper ......h, service businesses (including hotels, restaurants, and recreational services), government, transportation, and other activities (such as car sales, computer-related activities, and research and development). Both education and experience are assumed to increase earnings. For education, dummy variables are created to show three levels of educational attainment: (1) a person who has completed a high school degree is considered well educated; (2) a person who has obtained any type of secondary education qualification is labeled as "fairly educated"; and those who have neither “are not educated.” Work experience is a function of years of education and age. Due to the lack of data on the “actual number of years of work experience”, Oaxaca (1974) uses potential experience which is defined as: potential experience = (age) – (number of years of schooling completed) – 6 (697).